When will liability for GST arise for the financier of goods in a hire purchase agreement ?
If the financier accounts for GST on a cash basis, GST payable on a taxable supply under the hire purchase agreement will be attributable to the tax periods in which payments are received for the supply. If the financier accounts for GST on a non-cash basis, GST is payable upon issuing the tax invoice or receiving payment for the goods, whichever is earlier. If a tax invoice is issued in the tax period in which a hire purchase agreement is entered into, all the GST payable on the taxable part of the agreement is attributable to the tax period in which the agreement is entered into. Goods and Services Tax Ruling GSTR 2000/29 provides further information on the attribution of GST under section 29-25 of the GST Act.
Related Questions
- What are the GST implications if a hire purchase agreement is restructured during the currency of the agreement, where the outstanding balance is refinanced as a new hire purchase agreement?
- What are the GST implications if a hire purchase agreement is terminated during its currency, by the financier granting a loan with title passing to the recipient?
- When will liability for GST arise for the financier of goods in a hire purchase agreement ?
